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Holder Suit Alleges Underwriters
Manipulated Drugstore.com's IPO

a Wall Street Journal Staff Reporter

Updated June 28, 2001 12:01 a.m. ET

NEW YORK -- A lawsuit charges that underwriters and certain investors in the July 1999 initial public offering of Drugstore.com Inc. artificially inflated the stock's price and that the underwriters received excessive commissions to steer valuable offering-price stock to certain investors.

The lawsuit, seeking class-action status on behalf of potentially thousands of investors, was filed in U.S. District Court in Manhattan. Plaintiffs' attorneys from the firm of Stull, Stull & Brody claimed underwriters Morgan Stanley;...